Thousands of shoppers and commuters are forking out up to €2.90 an hour for the privilege of spending their money in the capital, resulting in a cash bonanza for city bosses.

The council yesterday said people who signed up to use a new electronic parking tag system would be given half-price parking over the Christmas period to help encourage shoppers and visitors into the city.

The parking tag system, introduced in May last year, allows motorists to park in any space in the city and pay by phone call or text message.

From next Monday until January 9, motorists who have a tag will be allowed to park in the retail core for €1.45, half the normal price for the high-demand zone. Parking prices in the outer zones of the city will also be halved.

A spokesman said the offer only applied to tag holders, as it was "unrealistic" to change the parking meters.

"It's the only thing we can do easily. Ninety per cent of our parking meters are old and if we were going to change the tariffs you'd have to do it on each individual machine. There'd be quite a lot of work required to do that as we have 1,200 machines. It's just not realistic," he said.

"We are hoping we'll double or treble the number of people using the tag. We have about 10,000 customers, but in the last 10 days the number of people signing up has doubled. "

Motorists must register their car and payment details at www.parkingtag.ie or at 0818 300 161. A tag or barcoded sticker is posted to their home and it is displayed on the windscreen.

The tag is linked to the vehicle registration number and the motorist's mobile phone. The motorist can park in any parking space in the city and pay by phone call or text message.